Cover: Analyzing Reduced Teenage Employment, 2000-2013

Analyzing Reduced Teenage Employment, 2000-2013

Published Feb 19, 2016

by Abigail Haddad

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Employment among 16-19 year-olds declined from about 41% in 2000 to 28% in 2013. Research regarding the possible negative effects of this is mixed: there is a significant literature on how working as a teenager affects later employment outcomes, but it is far from definitive. This dissertation builds a teenage labor market model and presents evidence regarding five different hypotheses for this decline in employment. These are: a reduction in the supply of teenage labor stemming from increased returns to education; decreased demand for teenage labor due to increased competition from immigrants; decreased demand for teenage labor due to increased competition from less-skilled workers; decreased demand for teenage labor due to increased competition from adult workers in general; and minimum wages that are increasingly binding. I find mixed evidence, with the strongest evidence in favor of lower supply due to higher returns to education. There is also evidence that demand for teenage labor has fallen, with a small amount of evidence specifically supporting the hypothesis that adult immigrants are increasingly competing with teenagers.

Because the evidence for the importance of working as a teenager on later employment outcomes and contribution to family finances is weak, public policy should not focus on getting teenagers in general to work. Instead, youth employment programs should focus specifically on the subset of teenagers who are disengaged from work and school. These teenagers differ in a variety of ways from their more-engaged peers. Among existing programs, there is significant variance in both degree of targeting and the extent to which program evaluation is occurring. The low-hanging fruit in terms of policy improvement is better evaluation of existing youth employment programs, with results informing funding.

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This document was submitted as a dissertation in December 2015 in partial fulfillment of the requirements of the doctoral degree in public policy analysis at the Pardee RAND Graduate School. The faculty committee that supervised and approved the dissertation consisted of Nelson Lim (Chair), Lou Mariano, and Paul Heaton.

This publication is part of the RAND dissertation series. Pardee RAND dissertations are produced by graduate fellows of the Pardee RAND Graduate School, the world's leading producer of Ph.D.'s in policy analysis. The dissertations are supervised, reviewed, and approved by a Pardee RAND faculty committee overseeing each dissertation.

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